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Acknowledgement

I want to thank Mr Avais Mushtaq Paracha, Manager Market Analysis for


giving me the chance to work with him on market analysis related to the
expansion plan 2010 and marketing assignments.

With the empowerment and help that he provided I got a chance to get a
know how about the real business world, coordinating with the people from
the NFDC (National Fertilizer Development Corporation) and the people from
AC Neilsen.

This really was a memorable experience working at Engro Chemicals


Pakistan
Project Undertaken

Objective:
The objective of the report is to develop huge amount of data over the years.
This includes data on fertilizer and agriculture industries. Some of the key
figures pertain to

Fertilizer Industry:

1. Demand

A. Month/competitor wise domestically produced fertilizer Off-takes


data for all products (political District/ Province/ Country)

B. Month/Competitor wise imported Fertilizer Off-takes data for all


products (political District/ Province/ Country).

C. Month wise off-takes data for N,P & K in nutrient tons.

D. Month/Competitor wise export data.

2. Supply

A. Month/Competitor /Plant wise fertilizer production data.

B. Month/Competitor wise fertilizer import data.

3. Urea/Phosphates month wise Demand & Supply along with closing


inventories data.

4. Historic domestic local sales prices for all fertilizers

5. Historic international prices for Urea & DAP CFR Karachi.

6. Historic gas prices for domestic markets.

Agriculture Industry

7. Crop Production Figures

8. Areas under various cultivations

9. Data on water supply and demand


10. Farmer Database

11. Crop Yields

12. Farm Economics for wheat, Sugarcane, Rice and cotton

Note: More data / information on fertilizer and agriculture industries if


identified & justified to be added in the list above

Besides the above mentioned data there also exists vast amount of
information on distribution and Market Development as well.

It is felt that there is need to organize the data so that meaningful analysis
can be performed for informed decision making purposes. The data will be
available to divisional head, all managers, Area Marketing Managers,
Marketing Coordinators, Brands Advisors and product officers and they will
be able to run customizable queries according to their requirements.
Company Profile: (source: www.engro.com)

From Esso to Engro Search for oil by Pak Stanvac, an Esso/Mobil joint venture in 1957, led to
the discovery of Mari gas field situated near Daharki -- a small town in upper Sindh province.
Esso was the first to study this development in detail and propose the establishment of a urea
plant in that area.
The proposal was approved by the government in 1964, which led to a fertilizer plant agreement
signed in December that year. Subsequently in 1965, the Esso Pakistan Fertilizer Company
Limited was incorporated, with 75% of the shares owned by Esso and 25% by the general public.
The construction of a urea plant commenced at Daharki the following year with the annual
capacity of 173,000 tons and production commenced in 1968. At US $ 43 million, it was the
single largest foreign investment by an MNC in the country.

A full-fledged marketing organization was established which undertook agronomic programs to


educate the farmers of Pakistan. As the nation’s first fertilizer brand, Engro (then Esso) helped
modernize traditional farming practices to boost farm yields, directly impacting the quality of life
not only for farmers and their families, but for the community at large. As a result of these
efforts, consumption of fertilizers increased in Pakistan, paving the way for the Company’s
branded urea called "Engro", an acronym for "Energy for Growth".

As part of an international name change program, Esso became Exxon in 1978 and the company
was renamed Exxon Chemical Pakistan Limited. The company continued to prosper as it
relentlessly pursued productivity gains and strived to attain professional excellence.

In 1991, Exxon decided to divest its fertilizer business on a global basis. The employees of
Exxon Chemical Pakistan Limited, in partnership with leading international and local financial
institutions bought out Exxon’s 75 percent equity. This was at the time and perhaps still is the
most successful employee buy-out in the corporate history of Pakistan. Renamed as Engro
Chemical Pakistan Limited, the Company has gone from strength to strength, reflected in its
consistent financial performance, growth of the core fertilizer business and diversification into
other fields.

Investment in people, process solutions and resource conservation initiatives have reduced
energy use per ton of urea by a third, whilst increasing urea production nearly six-fold since
1968. Not only does this save money, it stretches non-renewable energy sources and mitigates
the impact of waste. Along the way, a major milestone in plant capacity upgrade coincided with
the employee led buy-out; innovatively optimizing our resources, Engro re-located fertilizer
manufacturing plants from the UK and US to its Daharki plant site – an international first. Our
pioneering spirit continues in our social investments, exemplified by the only snake-bite
treatment facility in the Ghotki region and the first telemedicine intervention in the country.
Businesses of the company (www.engro.com)

The years since Exxon became Engro have been both exciting and rewarding for the
organization and its people. Challenges have been overcome, , goals achieved and
new goals set. Engro today stands recognized as a successful business operation
and a role model for doing business in Pakistan.

Engro Chemical Pakistan Limited (ECPL)

The Company’s current manufacturing base includes urea name plate capacity of
975,000 tons per annum and blended fertilizer (NPK) capacity of 160,000 tons per
year. A premier brand and nationwide presence ensure sellout production.
Additionally, the company imports and sells phosphatic fertilizers for balanced
fertility and improved farm yields. Engro’s share of Pakistan’s phosphates market
mirrors or exceeds its urea market share.

Expansion plans include a new urea plant of 1.3 million tons annual capacity, also at
Daharki. The US$ 1 billion project is well underway and on track for commercial
production in mid 2010. This addition will increase Engro’s urea market share to
35% from 19% at present.

Engro Vopak Terminal Limited (EVTL)

50:50 Joint Venture with Royal Vopak - a Netherlands based global leader in terminal
operations. EVTL operates a bulk liquid chemical terminal at Port Qasim, Karachi. It has an
impeccable safety record of handling a range of chemicals and LPG for over 10 years.

EVTL is building Pakistan’s first cryogenic Ethylene storage facility and expects to be ready by
early 2009. Given its experience with gasses, cryogenics, a brown field location and international
operating standards, EVTL is well-positioned to build a LNG terminal, being pursued by the
Government of Pakistan.

Engro Polymer and Chemicals Limited (EPCL)

Also at Port Qasim, this 56% Engro owned Company is involved in manufacturing, marketing
and selling Polyvinyl Chloride (PVC).

EPCL is undergoing expansion involving PVC production increase of 50,000 tones (current
capacity: 100,000 tons p.a) and back integration through setting up of an EDC/VCM plant and a
Chlor alkali plant. These initiatives are expected to conclude in phases by first half of 2009.

Avanceon (formerly known as Engro Innovative Automation Pvt. Limited)

A 63% owned subsidiary of Engro, Avanceon is the leading global automation business,
providing process & control solutions. It also offers Power & Energy Management software
solutions as well as High-End software that integrate production and business applications.

Previously operating in Pakistan and UAE, they have now penetrated in the USA market with the
merger of ENGRO Innovative and Advance Automation. Advance Automation is an award
winning technology solutions provider to manufacturers in North American and has been
awarded as the System Integrator of the Year 2007 by Control Engineering.

Synchronizing to a single brand worldwide with all the engineering Standards, processes, brand
identity and global brand recognition was a huge task and due to various different cultural factors
it was even complex then perceived.

After months of hard work AVANCEON emerged as the new name and the true Global
Automation Player. The new company name will help to reinforce the single brand identity that
has emerged over the last 16 months as the two formerly separate companies have successfully
worked to become a single global enterprise.

AVANCEON (Tomorrow’s Solutions Today)

Engro Foods Limited (EFL)

Engro Foods, a wholly owned subsidiary had its first full year of operations in 2007. The
Company continued expanding with additions to brand portfolio, milk production and
distribution capacities.

The portfolio now includes four impressive brands; Olper's milk, Olper’s cream, Olwell and
Tarang. Olper’s market share peaked at 17% during 2007.

EFL operates two dairy processing factories located in Sukkur, and Sahiwal. The company’s
milk collection network now boasts over 700 village milk collectors and 400 milk collection
centers. Covering 2400 villages across Pakistan, the activities of the Company touch the lives of
almost 51,000 farmers.

An exciting new venture is the diversification of dairy portfolio into ice cream. Work has
commenced full throttle for detailed engineering and market study with a view to launch of first
ice cream in 2009. Also on EFL slate is the establishment of a dairy farm with milking expected
to start in second quarter 2009.

Engro Energy Limited (EEL)

This wholly owned subsidiary is setting up an Independent Power Plant near Qadirpur in Sindh;
Targeting 2009 for commercial operations, the power project will have a net output of 217 MW.
The plant will utilize low heating value permeate gas from Qadirpur gas field which is currently
being flared.
Engro Eximp (Pvt.) Limited (EEPL)

Engro Eximp (Pvt.) Limited is a wholly owned subsidiary in the trading business of fertilizer
imports.
Course of Action

As was required by the supervisor a detail presentation was given to him related to the fertilizer
industry and trend analysis in it for the last 10 years.

After this in collaboration with the NFDC the data for 10 years for Fertilizer off takes,
production and trade was collected and as required competitor or product wise was formed.
Sheets for 1 years of all the three categories has ben attached in the appendix.

Lastly an assignment was done that includes forming os a uestionnare for theinternal branding of
the Zarkhez Product.
Presentation on the Fertilizer
Industry
What d
The cur
St

January
T

Total assets in m
in d u s t r y u r e a o f f t a k e

S e r i e s 1

5 4 0 0
5 2 0 0
to n n e s '0 0 0

5 0 0 0
4 8 0 0
4 6 0 0
4 4 0 0
4 2 0 0
4 0 0 0
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7
y e a r s

in d u s t r y D A P o fft a k e s

1 6 0 0
to n n e s '0 0 0

1 4 0 0
1 2 0 0

G
1 0 0 0
8 0 0 S e r ie s 1
6 0 0
4 0 0
2 0 0
0
2 0 0 32 0 0 4 2 0 0 5 2 0 0 62 0 0 7
y e a r s
GR

GR
n e t p r o f it a n d t o t a l r e v e n u e

3 5 0 0 0
3 0 0 0 0
2 5 0 0 0
2 0 0 0 0 s a le s r e v e n u e
1 5 0 0 0 n e t p r o f it
1 0 0 0 0
5 0 0 0

FAU
0
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7
y e a r s

G r o s s m a r g i n s

3 8
3 7
3 6
3 5
3 4
G r o s s m a r g in s
3 3

Sales Revenues
3 2
3 1
3 0

FA
2 9

rupees (FFC)
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7
y e a r s
FAU

FA
FAU

FAU
S a l e s r e v e n u e a n d n e t p r o f i t s

1 6 0 0 0
1 4 0 0 0
m illio n P K R

1 2 0 0 0
1 0 0 0 0
8 0 0 0
6 0 0 0
4 0 0 0
2 0 0 0
0
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7
y e a r s

S a le s r e v e nN ue e t p r o f it
FAU
G r o s s p r o f i t m a r g i n s

3 9
3 7
p e r c e n ta g e

3 5
3 3
3 1
2 9
2 7
2 5
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7
y e a r s

O u t p u t

6 0 0
T h o u san d m t

4 9 7 . 9 4
5 0 0 4 3 0 . 6 4 2 8 . 7 8 4 4 6 . 7
4 0 0 3 5 1 . 1 2

3 0 0
2 0 0
1 0 0
0
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7
y e a r s
2 5 0 0 0 2 3 1 8 3

2 0 0 0 0 1 8 2 7 6 1 7 6 0 2

1 5 0 0 0 1 2 1 7 3 1 2 7 9 8

1 0 0 0 0

5 0 0 0

0
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7

N e t p r o f i t

3 5 0 0
3 0 0 0
P K R ( m illio n s )

2 5 0 0
2 0 0 0
1 5 0 0

Sales revenue in million


1 0 0 0
5 0 0
0
2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7
Y e a r s
F e r t iliz e r d e m a n d c o m p o s it io n

7 0 6 3
6 0
p e r c e n ta g e

5 0
4 0
3 0 2 2
2 0
1 0 6 5 2 2
0
u r e a D A P N P C A N S S P O t h e r s
f e r t i l i z e r s
R O E ( % )

ROE
IN
RA
D/E ra
CU
Current ratios
CURRENT RATIO
POR
E
E
● Expa
FE

• Produ
FE
FE
● STA
Questionnare for internal
branding of Zarkhez
Assignment: Internal Branding of Zarkhez

Q1. “Zameen ke taqat Naslon ki khushaali” This statement refers to which


brand of Engro Chemicals
a. Engro Urea

b. Engro DAP

c. Engro Zorawar

d. Engro Zarkhez

Answer: D
Q2. How many different grades of Engro Zarkhez are there?
a. 1

b. 2

c. 3

d. 4

Answer: C
Different grades of Zarkhez are Zarkhez Green, Zarkhez Blue and Zarkhez
Yellow
Q3. Zarkhez grade 8:23:18 is targeted on which group of crops
a. Suger cane, potato, vegetables

b. Tobacco

c. Chillies, onions and other vegetables

d. Banana, Mango Apple, Citrus and other fruits

Answer: C
The NPK 8:23:18 grade is Zarkhez Green that is used for vegetables
Q4. Where is plant of Engro Zarkhez located?
a. Karachi

b. Dharki

c. Goth Machhi

d. Mirpur Mathelo

Answer: A
The plant of Engro Zarkhez is located at Port Qasim in Karachi
Q5. When was Engro Zarkhez launched?
a.2003-2004

b.2004-2005

c. 2005-2006

d.2006-2007

Answer: B
Engro NPK was relaunched as Engro Zarkhez in 2004-2005
Q6. How would you personify the brand Zarkhez in terms of age and income
group
Age
a.20-30 years

b.30-40 years

c. 40-50 years

d.50-60 years

Answer: B
Income Group
a.High Income

b.Middle High Income

c. Middle Low Income

d.Low Income

Answer: B
Q7. What was market share of Zarhkez in year 2008?
a. 31 %

b. 41 %

c. 51 %

d. 61 %

Answer: C
Average Zarkhez market share between 2001 and 09 in the Potash Industry
is 52%.
Q8. Which of the following are the salient features of Zarkhez over the
straight fertilizers?
1. Higher VCR

2. Convenience for Existing Potash users

3. Balanced nutrition

4. Low Cost

5. Easy Availability

a. 1, 3 & 4

b. 2, 4 & 5

c. 5, 2 & 1

d. 1,2 & 3

Answer: D
Zarkhez provides more value for your investment and at the same time
provides the crop with required ratio of NPK nutrients.
Q9. Zarkhez grade 17:17:17 is targeted on which group of crops
a. Suger cane, potato, vegetables

b. Tobacco

c. Chillies, onions and other vegetables

d. Banana, Mango Apple, Citrus and other fruits

Answer: D
The NPK 17:17:17 grade is Zarkhez Blue that is used for Fruits
Q10. Zarkhez grade 12:15:20 is targeted on which group of crops
a. Suger cane, potato, vegetables

b. Tobacco

c. Chillies, onions and other vegetables

d. Banana, Mango Apple, Citrus and other fruits

Answer: B
The NPK 12:15:20 grade is Zarkhez Yellow that is used for Tobacco.
Q 11. Which of the following nutrient in high in concentration in Zarkhez
a. Nitrogen (N)

b. Phosphorous ( P)
c. Potash ( K)

Answer: C
The use of Potash helps the crop in resistance to disease and pest attacks,
increases weight, improves quality, helps in nutrient transportation within
plant body and ensures better utilization of N & P.
Q12. What is the average use of potash in Pakistan?
a. Below 0.5 kg per acre

b. 0.5 – 1.0 kg per acre

c. 1.0 – 1.5 kg per acre

d. 1.5 – 2.0 kg per acre

Answer: A
In Pakistan the use of Potash is lowest in the world. Average use of Potash is
0.4Kg/acre in Pakistan compared to India and Egypt where the average use
is 4 and 6 kg / acre respectively
Appendix

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